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10 Feb 2023

China Labor Bulletin

China: Over 1,700 workers ordered to leave underwear factory following 'abrupt' closure

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"Hong Kong-owned undergarment factory in Dongguan shuts down, orders 1,700 workers to leave", 10 February 2023

  • Dongguan Gogo Garment Manufacturing Ltd. is the largest undergarment factory in Dongguan, China’s manufacturing hub, and it supplies high-end brands in Europe and the Americas. 
  • The reputable factory was reported to have paid decent wages and been stable employment for decades before recently owing workers wages and social insurance. But now the owners have no funds to compensate workers in light of the sudden layoffs.
  • The factory’s closure calls into question global supply chain practices and brand responsibility since the start of the pandemic.  

Workers at the largest undergarment factory in Dongguan, Guangdong province, began protesting on 5 January over owed wages and social insurance. On 10 January, the factory abruptly announced the closure of its business. Management told the more than 1,700 factory workers to leave the Gogo factory campus with their belongings within a week’s time. On 14 January, workers again marched in the streets to demand compensation. 

In its official notice, the Dongguan Gogo Garment Manufacturing Ltd. cites operating problems, including shrinking customer orders and “internal and external environmental factors.” The company noted that it has been in difficulty for some time and tried to avoid this outcome. When customer orders began to decline, it took cost-saving measures and tried to develop the domestic sales market, to no avail...

The factory produces or has produced high-end undergarments for brands in the European and American markets, including for Victoria’s Secret, Under Armour and Lululemon at the time of its closure...

Workers take collective action to demand wages, benefits, and severance pay

On 6 January, community members spotted a large number of factory workers walking in the area of the Gogo garment factory...It is now understood that their activity was related to their demand for wages and social insurance, and workers were again seen marching after nightfall.

After the announced closure, workers protested again on 14 January and demanded layoff compensation. On 20 January, a worker reported that discussions with management and the local government have been ongoing, and workers were given a very small amount of compensation...

The Gogo factory’s 10 January notice of the shutdown does not meet the 30 days’ notice requirement, and workers’ protests indicate that wages, benefits, and severance pay at this time are not in compliance with the law...